How to Pay Wholesale For Jewelry

By Richard C. Morais

One evening in Zurich I cut through the cobblestone backstreets of the “Altstadt” (old town), crossed the ancient bridges spanning the Limmat River, and banged on the door of Robert Vogelsang.

Robert is one of those exquisite Swiss jewelers-craftsmen not found in one of the predictably flashy boutiques of Zurich’s Bahnhofstrasse, but in a discrete five-floor townhouse in the Strehlgasse that runs from the elegant Hotel Storchen on the Limmat to the glittering shop-fronts of the Bahnhofstrasse. Robert and I go back a long time. We were in school together as teenagers at the American International School of Zurich.

Robert has exquisite taste and is very picky about using only the highest-grade stones in his jewelry. His work tends to be classic in style, but with slight contemporary flourishes, and that evening he showed me some of the pieces he had recently designed.

Burmese Sapphire Ring

Morganite Lovebird Pendant

His ring (above left) consists, for example, of an “unheated Burmese sapphire” of 13.22 ct, grounded in platinum and studded with 1.80 ct of brilliant-cut diamonds. Almost all sapphires on the market these days are heated by a technique that stabilizes the stone’s color; only a tiny amount of sapphires, the highest quality, are unheated as this one is. This Vogelsang-designed ring costs 350,000 Swiss Francs or $380,000. The “Lovebird Pendant” (above right) is fashioned out of a 17.61 ct Morganite (a rare form of pink beryl named after gem collector and banker J.P.Morgan), and 1.98 ct of brilliant cut diamonds. That pendant costs Sfr 33,800.

That night the Vogelsangs and I dined at the Kindli, a wood-paneled restaurant in the backstreets of Zurich that has been around since 1474. (Dishes run from lamb’s lettuce topped off with a boiled egg, to buttery calves livers and sage served alongside Swiss “Rösti,” grated boiled potatoes that are pan fried until crusty.) When I was growing up in Zurich, the Kindli boasted an umpah band, but has since become much more elegant and refined.

As we scraped our plates, Robert railed about the luxury “brands” in the jewelry business that, on the strength of their names, overcharged for mass produced designs studded by inferior stones, knowing full well that most of their clients can’t tell the difference. He said that in hand-crafted designs the jeweler constantly made “optical corrections” to flaws and errors as they hand-built the bespoke piece, which in turn became “the soul of a piece of jewelry.”

Robert’s a very principled fellow, and counting on this essential decency, I asked him if he wouldn’t mind letting me watch him work the jewelry stalls at the fair, Baselworld. I wanted to see how a pro negotiated the modern ”luxury” equivalent of a Roman orgy. Happily, he agreed.

So on a drizzly Thursday morning we met at Hall Six in Basel, a drab warehouse far from the fair’s main action. This was where Asian dealers who couldn’t afford the grand halls filled with Patek-Philippe and Cartier boutiques were pushed to quietly peddle their wares. We looked at trays full of citrine, peridot, topaz, opals, tanzanite, rose quartz, and aquamarines, semi-precious I thought, but Robert disabused me of this outdated notion. “A very special, rare and beautiful tourmaline can cost as much as a fine diamond,” he said.

A dealer from Jaipur, her hands covered in the ink drawings of a prenuptial mehndi, showed us a beautiful, seven-strand necklace of natural Persian Gulf pearls, each with a lovely luster and all soulfully uneven in shape. The 801 ct of pearls (pictured below) could be had for $360,000 and the dealer agreed to have the quality of the pearls officially certified by the Swiss Gemmological Institute on the premise. When we walked away, Robert said he would have offered $200,000 for the pearls and they probably would have settled around $250,000.

Persian Gulf Pearls

Back in the luxurious main halls, Janet Levy of J. & S.S. DeYoung of 5th Ave., New York, showed us an 1890 Tiffany pansy brooch, surrounded in diamonds, and a 1930s engraved jadeite pendant by Cartier. Then a fellow jeweler from Germany, a friend of Robert’s, hotfooted us to a nondescript stall a floor higher, where a dealer pulled out a tray of opals, from a relatively new Ethiopian mine, that were the length of a pinky finger. Robert and his friend had rarely seen opals of such size and quality.

Every stall we visited I began to see a pattern: a gem or piece of jewelry that would cost me $100,000 was being offered to Robert at $50,000. At the stall belonging to Rahaminov Diamonds of Los Angeles, for example, Amir Goldfiner instantly noticed that Robert was a “feinschmecker” – gem gourmand – and showed us a bracelet studded with high quality diamonds totaling 44.48 ct.

The light went on. I realized then that if you have a reputable jeweler, with whom you have been doing business for a long time, it’s wise to pay them a commission to purchase a piece of jewelry from a third party on your behalf. I asked Robert if he would do that for good customers, and he said he would, charging anywhere between 10% and 50% commission (depending on the value of the piece in question) plus VAT for finding the stone or jewelry, advising, and negotiating the purchase price on your behalf.

In other words, a diamond necklace retailing for $2 million, purchased through an insider like Robert acting as proxy, could cost you closer to $1.15 million.

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There are 4 comments

MARCH 17, 2012 6:21 P.M.

PentaOne wrote:

I am not sure what incentive one has to negotiate down the price when they are getting 10-50% commission on 2 million dollar sale.

MARCH 19, 2012 2:17 A.M.

Sarojkumar wrote:

Rings are precious for lifetime, we know what they matter to you. Our specialty is to bring you the art with different norm which is missing in all conventional jewelry. Mark the difference at Rings and Diamonds .

APRIL 11, 2012 2:43 P.M.

1 wrote:

-1'

AUGUST 19, 2012 4:02 A.M.

Earrings Swarovski wrote:

I am looking to find and buy a swarovski bead color chart with pearls. I have one for the crystal bead colors. I am looking for one that has pearls on it. Does anyone know where I can get this? I do alot of crafts and need pearls to show colors to people.. Thank You. I want to buy it...not just see colors online..

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About Penta

Written with Barron’s wit and often contrarian perspective, Penta provides the affluent with advice on how to navigate the world of wealth management, how to make savvy acquisitions ranging from vintage watches to second homes, and how to smartly manage family dynamics.

Richard C. Morais, Penta’s editor, was Forbes magazine’s longest serving foreign correspondent, has won multiple Business Journalist Of The Year Awards, and is the author of two novels: The Hundred-Foot Journey and Buddhaland, Brooklyn. Sonia Talati is Penta’s reporter about town, both online and for the magazine. She previously worked for the Wall Street Journal and various television station affiliates around the country. Sonia has a B.A. in economics from the University of California, Los Angeles, and an M.A. from Columbia University Graduate School of Journalism.